The Consumer Price Index (CPI) based on prices in February 2015 is 422.1 points (May 1988=100), 0.67% higher than in January 2015. The CPI less housing cost is 391.4 points, 0.57% higher than in January.

The CPI is 0.8% higher in February 2015 than in February 2014 while the CPI less housing cost is 0.9% lower than one year ago. Over the last three months, the CPI has increased by 0.3%, equivalent to an annual inflation rate of 1.0% (2.0% annual deflation rate for the CPI less housing cost).

The CPI compiled in the middle of February 2015, 422.1 points, is applicable for indexation purposes in April 2015. The old credit terms index for April 2015 is 8,334 points. Read more

In the last Treasury bonds auction of the Government Debt Management, the bidders had the option of purchasing securities in RIKB 17 0206 and RIKB 20 0205 with the sale of RIKB 15 0408, which matures on 8 April 2015. This time the bidders exercised their option to sell 96,157,929 kr. nominal value in RIKB 15 0408.

As stated in paragraph 5 of Terms of Invitation to Tender for Treasury bonds, the Government Debt Management offered the equivalent of 10% of the nominal value sold in the auction 20 February, at the price of accepted bids. This time Primary Dealers did exercise their right to purchase in RIKB 17 0206 for 1,023 m.kr. and in RIKB 20 0205 for 27 m.kr. Total outstanding nominal value of RIKB 17 0206 after the auction is now 12,983,000,000 kr. and 30,306,000,000 in RIKB 20 0205. Settlement date is 25 February 2015.

As stated in paragraph 5 of Terms of Invitation to Tender for Treasury bonds, the Government Debt Management offered the equivalent of 10% of the nominal value sold in the auction 20 February, at the price of accepted bids. This time Primary Dealers did exercise their right to purchased in RIKB 17 0206 for 1,023 m.kr. and in RIKB 20 0205 for 27 m.kr. Total outstanding nominal value of RIKB 17 0206 after the auction is now 12,983,000,000 kr. and 30,306,000,000 in RIKB 20 0205. Settlement date is 25 February 2015.

On Friday, 20 February at11:00 am, Government Debt Management will conduct an auction of Treasury bonds. In this auction nominal bonds RIKB 17 0206 and RIKB 20 0205 will be offered. The total amount of accepted bids will be announced after the auction.Press release (pdf)Auction terms (pdf)

Government Debt Management announces a correction of the nominal amount for the indexed RIKS 33 0321 bond in the 10 February 2015 auction. The corrected nominal amount is 37,877,169 kr. The total amount sold in the foreign currency auction was therefore 392,532,343 kr.

Today, 10 February 2015, an auction was held by The Central Bank of Iceland in which the Bank offered to purchase euros versus payment in the indexed Treasury series RIKS 33 0321. This measure is an element in the removal of restrictions on capital account transactions and will reduce the annual Treasury’s refinancing need. Bonds sold in the series amounted to 354,655,174 kr. nominal value.

The accepted exchange rate in the auction was 178 krona for each Euro.

Bids submitted at the price of 178 krona pr. Euro were reduced proportionally by 44.1011%.

On 6 February the fixed price for this Treasury bond was announced as 112.785619 kr. with accrued interest and indexation (e. dirty price) with a settlement date of 13 February 2015 (yield 2.88%)1

As stated in paragraph 5 of Terms of Invitation to Tender for Treasury bonds, the Government Debt Management offered the equivalent of 10% of the nominal value sold in the auction 6 February, at the price of accepted bids. This time Primary Dealers did not exercise their right to purchased in RIKB 17 0206. Total outstanding nominal value of RIKB 17 0206 after the auction is now 1,630,000,000 kr. Settlement date is 11 February 2015.

In the last Treasury bonds auction of the Government Debt Management, the bidders had the option of purchasing securities in RIKB 17 0206 with the sale of RIKB 15 0408, which matures on 8 April 2015. This time the bidders exercised their option to sell 644,111,000 kr. nominal value.

On Thursday, 12 February at 11:00a.m. Government Debt Management will conduct an auction of Treasury bills RIKV 15 0515 and RIKV 15 0817 which mature on 15 May and 17 August 2015.Press release (pdf)Auction terms (pdf)

Government Debt Management has decided to change the format of its announcements of auction results, effective today. Henceforth, the auction results will be published in table format. It has also been decided to shorten the length of time between the end of each auction and the publication of the auction results on news systems from 45 minutes to 30 minutes.

According to an announcement published by the Central Bank of Iceland on 9 December 2014 regarding the Central Bank of Iceland foreign currency auction to be held on 10 February 2015, the Terms of Auction stated that the swap rate for the Bank’s purchase of foreign currency in connection with the sale of Treasury bonds in the series RIKS 33 0321 would be published at the close of business on 6 February 2015.

It has been decided that the number of Treasury bond units per euro shall be based on the auction price and the fixed price of the Treasury bonds, which is 112.785619 kr. per Treasury bond unit with accrued interest and indexation (dirty price), assuming a settlement date of 13 February 2015 (yield 2.88%).1

RIKB 17 0206:Number of bids in this series were 15, amounting to 3,280 m.kr. nominal value. Bids were accepted for 1,630 m.kr. nominal value at the clean price of 99.538 (yield of 5.25%).Auction results (pdf)

On Friday, 6 February at11:00 am, Government Debt Management will conduct an auction of Treasury bonds.

A new two-year nominal bonds, RIKB 17 0206, will be offered. The bonds are interest-bearing and pay 5.00% interest rate annually every 6 February. The maturity date is 6 February 2017. Description of the bond is attached to this press release and further information can be obtained from the website www.gdm.is. The total amount of accepted bids will be announced after the auction.Press release (pdf)Auction terms (pdf)DescriptionRIKB170206 (pdf)

The Monetary Policy Committee (MPC) of the Central Bank of Iceland has decided to keep the Bank’s interest rates unchanged. The Bank’s key interest rate – the rate on seven-day term deposits – will therefore remain 4.5%.

Fitch ratings has revised the Outlook on Iceland’s Long-Term foreign currency and local currency IDRs to ‘Positive ‘ from ‘Stable ‘ and affirmed the ratings at ‘BBB’ and ‘BBB+’ respectively. The issue ratings on Iceland’s senior unsecured foreign and local currency bonds are also affirmed at ‘BBB’ and ‘BBB+’. The Country Ceiling is affirmed at ‘BBB’ and the Short-term foreign currency IDR at ‘F3’. FitchRatingsReport(pdf)

The Consumer Price Index (CPI) based on prices in January 2015 is 419.3 points (May 1988=100), 0.71% lower than in December 2014. The CPI less housing cost is 389.2 points, 1.29% lower than in December.

The CPI is 0,8% higher in January 2015 than in January 2014 while the CPI less housing cost is 0.6% lower than one year ago. Over the last three months, the CPI has decreased by 0.9%, equivalent to an annual deflation rate of 3.6% (6.5% annual deflation rate for the CPI less housing cost).

The CPI compiled in the middle of January 2015, 419.3 points, is applicable for indexation purposes in March 2015. The old credit terms index for March 2015 is 8,279 points.

As stated in paragraph 5 of Terms of Invitation to Tender for Treasury bonds, the Government Debt Management offered the equivalent of 10% of the nominal value sold in the auction 16 January, at the price of accepted bids. This time Primary Dealers did exercise their right to purchased 115 m.kr in RIKB 20 0205 and 635 m.kr in RIKB 31 0124 additional issues. Therefore the total amount of bonds issued in this auction in RIKB 20 0205 is 2,215 m.kr. and 7,035 m.kr. in RIKB 31 0124 in nominal value. Total outstanding nominal value of RIKB 20 0205 after the auction is now 30,009,000,000 kr. and 85,286,400,000 kr. in RIKB 31 0124. Settlement date is 21 January 2015.

Credit rating agencies Standard & Poor’s and Fitch are required to publish the issuance dates of EU member states’ credit ratings pursuant to Regulation no. 462/2013. The purposes of the regulation are to enhance transparency in rating agencies’ operations, improve the rating process, and increase the companies’ responsibility for the credit ratings, which have a demonstrable effect on the credit terms offered to EU member states. Because Moody‘s primary analyst of the Republic of Iceland is located outside the EU, the rating agency is not required to publish the issuance dates.

The regulation applies in the EEA states, although neither it nor some recent rules on financial supervision, etc., (cf., for example, Regulation no. 1095/2010) has been formally implemented in the EEA states.

The publication schedule is entirely the responsibility of the rating agencies themselves. The 2015 publication dates for Iceland’s ratings are as follows:

On Friday, 16 January at11:00 am, Government Debt Management will conduct an auction of Treasury bonds.In this auction nominal bonds RIKB 20 0205 and RIKB 31 0124 will be offered. The total amount of accepted bids will be announced after the auction.Press release (pdf)Auction terms (pdf)

RIKV 15 0415:Number of bids in the series was 6 amounting to ISK 8,650 million nominal value. Bids were accepted for ISK 8,050 million nominal value at the price of 99.047 (simple interest of 3.85%).

RIKV 15 0715:Number of bids in the series was 4 amounting to ISK 560 million nominal value. Bids were accepted for ISK 360 million nominal value at the price of 98.125 (simple interest of 3.80%).Auction results (pdf)

On Tuesday, 13 January at 11:00a.m. Government Debt Management will conduct an auction of Treasury bills RIKV 15 0415 and RIKV 15 0715 which mature on 15 April and 15 July 2015.Press release (pdf)Auction terms (pdf)

• In Q1, benchmark Treasury bonds will be offered for sale in the amount of 15-25 b.kr. market value. • A new nominal two-year bond series maturing in 2017 is to be launched. • It is also planned to issue Treasury bonds in the following series: RIKB 20 0205 and RIKB 31 0124.

Exchange rate

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